Amid soaring venture funding and booming adoption of robo-advisors, the city-state is on a path to becoming a leading wealthtech hub in Asia-Pacific. Over the past four years, venture funding to Singapore-based wealthtechs grew seven-fold from US$23 million in 2017 to US$161 million in 2021, drastically outpacing Asia’s two-fold growth from US$1.1 billion to US$2.2 billion.
Singapore’s share of total Asian wealthtech venture funding tripled to 2% to 7%, indicating a positive trend of increased capital inflows directed to Singaporean wealthtech companies.
Singapore’s wealthtech companies still largely remain rather young and in the development phase, with one-third of local startups being founded only in the last three years, the report notes. However, venture deals have started moving from angel and seed to early stage, and venture sizes are increasing steadily, showcasing that the sector is maturing.
Booming venture funding activity has been driven by growing adoption of robo-advisors in the city-state where at least three of Singapore’s largest robo-advisors have reported strong assets under management (AUM) figures since 2020.
APAC has witnessed massive wealth creation, driven by rapid economic growth in China and India. As of 2021, Asia financial wealth stood at US$52.3 trillion, taking approximately a 20% share of global wealth. By 2026, the region is expected to surpass Europe as the second largest regional wealth hub, with both high-net-worth individuals (HNWI) and ultra-high-net-worth individuals (UHNWIs) set to grow among the quickest across all regions.
Moving forward, digital wealth providers will need to shape their offerings according to evolving customer demand. Several research have pointed out to rising interest in climate-based investments, especially among younger generation of millennial and Gen Z investors.